The COVID-19 pandemic created major disruption across all industries. Lockdowns, remote work, isolation and quarantine, social distancing, and masking, all hit at once. For more than two years, people were adapting and adopting new methods of doing what was possible in a world that seemed impossible. And as the country comes out of the depths of the pandemic, the old normal is being replaced in many places with the term a “new normal.”
This new normal, a hybrid of old practices and responses to the COVID crisis, has almost immediately been hit by economic factors that are testing the validity of those changes. Inflation, supply-chain disruption, fossil fuel prices and availability, worker shortages, and rising interest rates are battling for attention. Sustainability and resilience are keys to success in this tumultuous environment.
How companies that were on the path to, but hadn’t reached, digital transformation reacted to the pandemic has caused many to reevaluate their approach. Samsara, the connected operations cloud company, issued its inaugural State of Connected Operations Report recently with information on how 1,500+ operations leaders’ digitization drives business resilience, why the new industrial workforce is demanding intelligent tools, and how investments in sustainability are paying off.
The research found that Connected Operations Leaders—those who reported the highest level of digital maturity–are better equipped to thrive in 2022 and beyond. For example, the supply-chain model that operators used prior to 2020 broke during the COVID-19 pandemic. The global economy’s most important industries have since faced historic levels of disruption. Leaders seek restoration, but also a fundamental change in their operations that will provide resilience in the decades to come.
Digitization is enabling new agility as leaders assess and respond based on realtime data. Samsara also discovered that 95% of respondents agree that digitizing their operations improves their ability to weather disruptions. Connected operations are reaping the financial benefits of digital transformation, as 99% are reaping increased net profits from such investments. Compared to respondents in the beginning stages of digitization, leaders in connected operations were nearly twice as likely to exceed revenue goals.
Considering 86% of respondents in the beginning stage of digitization reported investments paying off, it is clear digital technologies have the power to deliver a clear return on investment swiftly and can help organizations weather economic challenges and even downturns. Legacy systems, on the other hand, are holding organizations back and siloed data is compounding problems; 89% of respondents agreed that disjointed technology and data has negatively impacted their bottomlines.
Modernizing the technology stack is top of mind to address this challenge, as 84% state updating legacy tools has proven to be a high or critical priority for their organization in 2022. Companies that digitize smarter and faster can reap the benefits sooner and better equip the firms to rise above future challenges.
Operational leaders are not immune, however, to the “Great Resignation” and extremely tight labor markets. Today’s workforce has new demands–modern tools that increase safety, improve workflows, and stack up to the technologies they use in their personal lives. According to the Samsara findings top influential factors for recruiting and retaining employees are improving workplace safety (56%) and implementing easy-to-use technology (54%).
The era of remote work has left a lasting imprint on physical operations. Almost all respondents (91%) currently offer technology that enables employees to perform some or all of their work remotely. Further, implementing flexible work options this year is a high or critical priority for 81%. For example, organizations can now use real-time diagnostics to complete asset inspections remotely, which increases safety and could save an employee a multi-hour round trip to a remote site.
Applications of AI (artificial intelligence) and automation have become vital for physical operations. Samsara found that 90% of respondents have implemented AI and automation technologies or plan to by 2023. These technologies can address a need for increased safety and enable employees to spend less time on repetitive tasks. The vast majority (90%) say they expect to increase employee retention as a result of AI and automation adoption. Further, 95% that have already implemented these technologies report it has led to an increase in employee retention.
Other benefits of digitalization include greater business agility (45%), greater employee safety (44%), greater upskilling opportunities for employees (43%), and higher employee satisfaction (43%). Compared to respondents in the beginning stage of digitization, connected operations leaders were more likely (+31%) to report higher employee satisfaction as a benefit. AI and automation are becoming integral to improving employee experience.
Soaring fuel prices have shaken global industrial operations. The sudden increase brought supply-chain costs to new levels and has caused a downstream effect on consumer prices. This has led operations leaders to reevaluate their investments in vehicle types. In response to rising fuel prices, nearly half (49%) of respondents have accelerated their transition to EVs (electric vehicles).
Technology is playing an important role in transitioning fleets to EVs while increasing fuel economy today. For example, by tracking electrification criteria like average and max miles driven, fuel costs, and more, organizations can identify which vehicles are most qualified for replacement with EVs. In addition, telematics solutions with real-time GPS tracking and remote vehicle diagnostics can help plan the most efficient routes.
Sustainability has become a top priority due to societal demands but predominantly because it’s good for business. For those that have a sustainability program in place, the top-reported benefits are increased access to business opportunities (57%) and higher employee satisfaction (57%). Further, 42% of respondents reported revenue gains as a result of their sustainability program.
Of the 1,500+ operations leaders Samsara surveyed, only 7% reported the highest level of digital maturity—indicating that the digital transformation of physical operations is in its early innings. Despite their immense importance and impact, the people that keep physical operations running—drivers, field technicians, safety managers, warehouse supervisors, and beyond—have historically been underserved by technology. Now, that is changing.
During the past decade, IoT (Internet of Things) technology has reached a critical inflection point. Cameras and sensors have become more portable and affordable. High-bandwidth cellular networks have made it possible to stream incredible volumes of data in real time. Efficiencies in cloud computing and storage have paved the way for artificial intelligence and automation.
As these technologies have become more accessible, affordable, and advanced, their applications to physical operations have multiplied; just a few examples include telematics, AI cameras, workflow apps, and asset tracking. Many organizations have already adopted these technologies, and the exceptional circumstances of the past few years have further accelerated the digital transformation that was already underway.
Global supply-chain disruptions, labor shortages, and rising costs have put additional pressure on physical operations, reinforcing the need for real-time data to adapt to ever-changing dynamics. In these times, early adopters of digital technologies are proving to be more agile and resilient.
While advancements in technology caused the shift towards digitization, the last few years of unprecedented global disruptions have accelerated it. The top action organizations are taking in response to rising fuel costs, for instance, is increasing their monitoring of powered assets (60%), such as heavy equipment, off-highway vehicles, construction equipment, generators, and compressors. These organizations are using realtime data on idling and fuel consumption to proactively identify and target inefficiencies. Similarly, more than half (54%) have invested in technology to optimize routing, further leveraging digital tools to increase operational efficiency
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